Pinellas municipalities increase partnerships with private CRE providers
By Breanne Williams
Tampa Bay Business Journal
Published: Feb 4, 2022

Aging municipal facilities and shifting demands for service are beginning to spark a new trend in how municipalities handle real estate.

Rather than use limited staff to pursue burgeoning real estate transactions, municipalities are starting to work with private commercial real estate providers to bring their visions to life. Paula Clair Smith, managing director of commercial services at Colliers, has helped manage two recent deals in Pinellas County and said it’s a demand the company is seeing in the local market.

“When you tried to work with a government entity in years past it was always, ‘Oh no we don’t work with brokers,’ but now they’re opening their arms for us,” Smith said. “They want us to work for them. It’s a change that we first noticed in this market around two years ago. And now Colliers has developed this reputation throughout the state of working with these municipalities.”

Smith represented the city of Largo in purchasing land for a new city hall and Pinellas County in locating a new training facility for its Supervisor of Elections. In many cases, municipalities can add into the contract that the buyer rep can be paid by the seller, which saves both costs and staff time, she said.

As city and county buildings age, Smith said municipalities are starting to focus on relocating to centrally located areas while consolidating operations and merging services into one space. Maintenance on large, old facilities is adding up and municipalities are modernizing their spaces.

“Municipalities want to be front and center with their people,” Smith said. “They can’t have everyone working remotely so while some things have changed with work from home, they still need traditional spaces for their services. What we’ve been seeing is they want to be attractive, they want to be perceived as modern and they’re trying to upgrade their image as well.”

The company is starting to receive calls from other municipalities around the country as they seek out similar successful partnerships to what is happening in Florida.

Ken Krasnow, vice chairman of Institutional Investor Services for Florida for Colliers, specializes in providing real estate consulting and brokerage services for municipalities throughout Florida. His team recently represented Sarasota County in selling its administrative building for $25 million and has a listing for the city of Port Orange for 9.62 acres of riverfront land for a mixed-use riverwalk district.

However, the current structure of many government branches still relies on time-consuming processes that have long made real estate ventures a strenuous ordeal. For the partnership between governments and private real estate providers to continue to grow a change will need to be made.

“For it to really continue and for it to be successful for some of these government entities, some of the processes are going to have to change,” Smith said. “You’re going to have to go to the county administrator or the state legislature or whoever the government in question is and say, ‘We need to change this process that you’re asking us to do in order to effectively transact in an open market.’ Otherwise, they’re restricted to buying off-market products because on the open market they can’t compete due to the process they’re required to follow.”